Translated material
Open Russia
The government promises not to isolate the Russian economy from the global one
Russian Prime Minister Vladimir Putin yesterday spoke out against the country's self-isolation and announced Russia's open foreign economic policy. Adopting the “Main Directions of the Country’s Foreign Economic Policy until 2020” at a meeting of the Cabinet of Ministers, he said: “In the context of the financial crisis that the whole world is currently experiencing, the temptation for simple solutions is great. Of course, we must take into account the realities of today, and in our practical policies we do this, but strategically, of course, isolationism is absolutely not our choice.” The Prime Minister considers restrictions on the movement of capital unacceptable and harmful.“Our choice is different - this is the further integration of Russia into the world economy; it, of course, is changing before our eyes and will be different. But the prospect is still in joining efforts, and not only to overcome the crisis, but also to ensure progress,” the head of government emphasized. And he made a reservation that the rules of the game in the global economy must be fair and transparent.
Here the Russian prime minister moved on to perhaps the most difficult part for himself. On the problem of Russia's accession to the World Trade Organization (WTO). Let us note that those who have already become partially familiar with the foreign economic policy strategy until 2020 might have gotten the impression that Russia has turned around and is “going to the East.” The foreign trade priorities in this document include China, India, Iran, and the EurAsEC countries. However, Putin introduced an amendment to such an unambiguous interpretation of the country’s future foreign trade course. The prime minister said: “We remain interested and will work on joining the WTO, and we are ready for dialogue with the European Union on a new strategic partnership agreement - issues of economic interaction have always occupied and will continue to occupy a significant place in this agreement.” “We will patiently and reasonably conduct relevant negotiations,” he noted.
A source in the Cabinet of Ministers explained to a Vremya Novostei correspondent that “the Russian government will not now pursue deadlines for joining the WTO.” “Time has shown that this is unproductive,” he noted. - Most of the agreements will continue to work. But there are also some controversial positions that we will reconsider.”
Speaking about the foreign economic policy strategy itself, Mr. Putin named old diseases of the domestic economy. The raw material structure of exports, the loss to Western producers on their own domestic sites, “contrived barriers in their foreign economic activity,” and so on. “We are being squeezed by imports,” he said and added: “We need to turn the system of state support for exports into a convenient and accessible development tool for domestic producers, and above all for those industries where we have significant export potential.” The prime minister called for using the benefits opening up as a result of the crisis and at the same time “insuring yourself against potential and existing risks.”
As a result, the document was approved as a whole. And the head of the Ministry of Economic Development, which wrote the strategy, Elvira Nabiullina, said that the government would focus on supporting high-tech exports. Even the possibility of creating new auxiliary institutions is being considered. Ms. Nabiullina said that there is an option to create an agency for insuring export contracts “within the VEB structure.” It is not yet clear what the capitalization and configuration of such an agency will be. The head of the Ministry of Economic Development promised to clarify the issue in the near future.
The rest of the time at the government meeting, following tradition, the Prime Minister diligently reassured the markets and the people. Finance Minister Alexei Kudrin duly reported that all legislative changes necessary to support the banking sector are ready, will be signed this week and will come into force. Out of habit, the prime minister did not spare money, saying that if there is not enough, we will give more. Mr. Kudrin fearfully explained that there was enough money.
Turning to the head of the Central Bank, Sergei Ignatiev, Mr. Putin asked whether the banking system was accepting the billions being poured in. “The situation is not easy,” Mr. Ignatiev admitted honestly. “I won’t say that there has been any dramatic improvement there.” Here he decided to allow himself some optimism, calling the situation stable. “Well, in any case, liquidity filling is happening?” - asked the prime minister. “Well, yes,” the head of the Central Bank answered doubtfully.
Considering business criticism of decisions to reform the pension system through an actual increase in the single social tax, the prime minister showed that here too he is ready to make new “sacrifices.” In a conversation with Ms. Nabiullina, Vladimir Putin once again demanded increased support for small businesses. When she said that the Ministry of Economic Development was preparing new programs, the prime minister clarified: “I hope that support will increase significantly?!” The chief economist smiled knowingly. “Oh, I see, Alexey Leonidovich (Kudrin - Ed. ) nods, which means he agrees,” Mr. Putin noted with satisfaction.
The policy of “magnetic calm,” which until now was actively pursued mainly by the prime minister himself, will now be supported in the government and presidential administration by first-tier newsmakers. This is First Deputy Prime Minister Igor Shuvalov, “Vice” Alexei Kudrin, and Presidential Aide Arkady Dvorkovich. According to Igor Shuvalov, they will inform journalists and society on a weekly basis about the specific steps of the president and the government. And this should also become an indicator of Russia’s openness.
Yesterday, after the end of the cabinet meeting, Mr. Shuvalov personally conducted explanatory work in the White House press center. He promised the Russians that there would be no landslide devaluation of the ruble. “If we give a commitment of 700 thousand rubles. (on private deposits. - Ed. ) to maintain, but at the same time let’s allow for devaluation - this will not make any sense,” he noted. The First Deputy Prime Minister also said that the government “has no plans to stupidly cut banks.” “I can only say that all the rumors that we will support a certain number of banks and the rest will die are not true,” said Mr. Shuvalov. “A system is being proposed in which everyone will be given a chance. This does not mean that everyone will use it, because somewhere you will need to add your extra penny of capital, somewhere you will need to come to an agreement with other shareholders, somewhere you will need to look for a consolidating start to join another bank.”
Igor Shuvalov called for maintaining the existing exchange structure. “Regarding the closure of sites: if there is a need, then it is necessary, if not, then it is not necessary. It seems to me that the situation now is such that there is no need,” he noted.
And Mr. Shuvalov also made a programmatic political statement: “We have no intention of getting our hands on as much as possible and increasing the public sector. We have an attitude that we make a profit and minimize the consequences of the crisis. If at some point the state becomes the main creditor, there is no need to be afraid of this. But at the same time, we must receive income - and we remember this,” the First Deputy Prime Minister assured.